WBCS.LIVE practice question

When Indian Rupee gets depreciated vis-à-vis U.S. dollar, it usually makes our

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Exports Cheaper and Imports Costlier
  2. Imports Cheaper and Exports Costlier
  3. Both Exports and Imports Costlier
  4. No effect on Exports and Imports

Correct answer and explanation

Correct answer: Exports Cheaper and Imports Costlier

Explanation: ✅ Correct Answer: A) Exports Cheaper and Imports Costlier 📚 Explanation: When the value of the rupee falls, it takes fewer dollars for foreigners to buy Indian goods, which makes our exports more affordable and competitive. At the same time, it takes more rupees to buy foreign goods, making imports more expensive. This economic shift can help domestic manufacturers who sell abroad but may lead to inflation due to higher costs of imported oil and technology. It is a standard result of currency depreciation in international trade.